related:
Realty Check:Treasury Confirms Underwater Help -- I want to start with Neil Barofsky, Special Inspector General of TARP, who in no uncertain terms, call the Treasury's $75 billion Home Affordable Modification Program a failure. He cited the 3-4 million borrowers that the Administration initially claimed it would help and added, "if this was the goal, absent some unexpected or unanticipated change in circumstances, it will not be met."

He went on to detail troubles with HAMP's implementation: Computer issues, Treasury continually changing the process. Then he hit on the real issue: Initially, Treasury pressured servicers to just get borrowers into trial modifications even without verified documentation. "This created a huge backlog of trial modifications and diverted scarce resources, and worst of all may have actually harmed the people this program was intended to help."...

The Big Picture:More Foreclosures, Please . . . -- I have been dismayed about the latest actions out of Washington and Wall Street. The banks are now pushing all manner of mortgage mods and foreclosure abatements. These are little more than “extend & pretend” measures, designed to put off the day of reckoning. They are not only ineffective, they are counter-productive. They reward the reckless and punish the responsible, and create a moral hazard. Worse yet, they penalize middle America for the sake of giant Wall Street banks.

It may sound counter-intuitive, but the best thing for the nation (but not necessarily the banks) is to allow the foreclosure process to proceed unimpeded. We need more, not less foreclosures. . . Punishing the Prudent . . . Rewarding Bad Banks ...

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Seeking Alpha:On Principal Reduction and Social Acrimony -- We often like to talk about "benefit-benefit" analysis versus "cost-benefit" analysis. On Wall Street, it's almost always benefit-benefit because almost every "solution" the US has come up with in the past few years to this economic disaster has pulled in benefits with the costs pushed out (onto the public at large) to a future date. So we do not "feel" the negatives now, and only enjoy the positives. Bailouts, handouts, subsidization, easy money, the whole cadre of "good times."Specific to the housing market, we have seen a litany of solutions which, frankly, are unfair to the "responsible" and reward the not so responsible*...

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LA Times:Bank of America to reduce mortgage principal for some borrowers -- Amid increasing government pressure to stem foreclosures, Bank of America Corp. said Wednesday that it would offer to erase as much as $3 billion in principal owed by thousands of severely delinquent borrowers who owe more than their homes are worth...

The OCC and the OTS report covers nearly 34m loans totaling $6trn in principal balances, representing 64% of all outstanding mortgages in the US. Overall mortgage performance declined for the seventh consecutive quarter, as 86.4% of the mortgages studied were current and performing at the end of Q409...